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Digital Marketing, eCommerce, Marketing Trends, Online Marketing, Social Commerce, Social Media

The Evolution of Social Commerce: Types, Trends and Future

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Social commerce is a form of commerce mediated by social media and is converging both online and offline environments. In social commerce, people do commerce or intentionally explore commerce opportunities by participating and/or engaging in a collaborative online environment. As a relatively new phenomenon, social commerce has evolved quickly in practice, yet has gained little attention in the IS discipline. It presents new opportunities to examine issues related to information/content, business strategies, management, technologies, and people’s behavior.

With its pervasiveness in businesses and people’s lives, social commerce presents ample research opportunities that can have both theoretical and practical significance and implications. Few research trace the evolutionary patterns of social commerce chronologically, based on trade articles and academic publications in recent times. A framework is under development that combines people, management, technology, and information dimensions is used to provide a systematic analysis of social commerce development.

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Since 2005, the year the term social commerce was incepted, assumptions and understanding of people in social commerce move from a simple and general description of human social nature to a rich exploration with different angles from social psychology, social heuristics, national culture, and economic situations. On the management dimension, business strategies and models evolve from the short-tail to long-tail thinking, with invented concepts such as branded social networks/communities, niche social networks/communities, niche brands, co-creating, team-buying, and multichannel social networks.

Technologically, IT platforms and capabilities for social commerce evolve from blogs, to social networking sites, to media-sharing sites, and to smartphones. While Facebook becomes a profit-generating platform, creating the notion of f-commerce, Google and Twitter become strong competitors with great potentials. Information in social commerce evolves from peer-generated, to community-generated (crowdsourcing), to consumer and marketer co-created, and to global crowd sourced.

Social commerce an on-platform buying has received mixed responses from users. Twitter recently abandoned plans for their on-platform buy buttons, while Facebook’s looking to invest more into bots and making purchases via Messenger, which many see as the next big shift if the social ecommerce space and you can now purchase movie tickets via Snapchat. Given the various approaches and audience responses, it’s hard to know exactly what the future holds for on-platform purchases and buy buttons, but what is clear is that we’re going to see more of them, more platforms will try quick purchase tools and automated buying before we have a definitive understanding of what the future holds for such tools.

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Over the last years social commerce platforms evolve from an amalgamation of features like discussion forums, wikis and ideation to integrated platforms like Jive, Lithium and Telligent. These latter iterations blurred the lines of elements you might find in traditional portals and features from mainstream social networks like Facebook, LinkedIn and Twitter. Some of the first generation community implementations were lightly integrated but still viewed as separate tools in the digital suite of enterprise applications for customers, partners and employees. Examples of dedicated online communities could be seen for customer support, which acted separately from external social media channels, traditional website and service environments.

Today, social commerce denotes a wide range of shopping, recommending and selling behaviors. We’ve done our best to group them into seven categories, but would love your feedback to improve them in the comments section below.

Seven Types of Social Commerce

  1. Peer-to-peer sales platforms (eBay, Etsy, Amazon Marketplace): Community-based marketplaces, or bazaars, where individuals communicate and sell directly to other individuals.
  2. Social network-driven sales (Facebook, Pinterest, Twitter): Sales driven by referrals from established social networks, or take place on the networks themselves (i.e., through a “shop” tab on Facebook).
  3. Group buying (Groupon, LivingSocial): Products and services offered at a reduced rate if enough buyers agree to make the purchase.
  4. Peer recommendations (Amazon, Yelp, JustBoughtIt): Sites that aggregate product or service reviews, recommend products based on others’ purchasing history (i.e. “Others who bought item x also bought item y,” as seen on Amazon), and/or reward individuals for sharing products and purchases with friends through social networks.
  5. User-curated shopping (The Fancy, Lyst, Svpply): Shopping-focused sites where users create and share lists of products and services for others to shop from.
  6. Participatory commerce (Threadless, Kickstarter, CutOnYourBias): Consumers become involved directly in the production process through voting, funding and collaboratively designing products.
  7. Social shopping (Motilo, Fashism, GoTryItOn):. Sites that attempt to replicate shopping offline with friends by including chat and forum features for exchanging advice and opinions.

Social commerce is still in its infancy. None of the major social networks — Facebook, Twitter, Pinterest — have yet figured out how to bring transactions directly to their platforms, instead directing retailers to use earned and paid media to bring customers to their online storefronts.

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About Md. Moulude Hossain

FinTech | AVP, Business Development KONA Software Lab Limited

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